When it comes to the world of finance, school teaches you how to earn money. What mostly escapes our education system is personal finance management. This is the missing link between earning an income and financial freedom. In most cases, the results of poor financial literacy include sinking into endless debt cycles and failure to reach your financial goals.

If you want to get out of bad debts and experience financial freedom, here are useful tips you should never forget:

1. Find ways to increase your income

Always remember that expenses increase. Therefore, you should counter this by looking for multiple sources of income. It can be through starting a small business, a side hustle, or working part-time apart from the regular job.

When you have extra income, you’ll manage to cope with rising bills and in the process avoid piling debts. If you have a passion or hobby, turn it into an income generating activity. With time you’ll be surprised at how it grows into a worthy venture.

2. Spend less than you earn

Your expenses should be less than your income. Aim at building a lifestyle that you can comfortably maintain with your income. You don’t have to break your bank account just to project an image of luxury. Financial freedom doesn’t mean looking rich but living rich. Therefore, stop the habit of trying to impress people with expensive suits or driving a luxurious car to show off.

A lifestyle that is financially unsustainable will soon burst like a bubble living you embarrassed. It leads one into unmanageable debts. Look for ways to cut down on unnecessary expenditure. It’s also wise to shop around before buying goods. This is because some stores sell the same product at lower prices than others. Cooking at home may save you more money than eating out in a hotel.

3. Have a working budget

This is your spending plan for a month and the whole year. A budget is an important guide to achieve your financial goals. Without a budget, you’re going to spend your money on the things you never needed. Determine what percentage of income to save and prudently spend what remains. Consider priorities when making your budget. The objective is to spend your money on the most necessary items first.

Your budget should be as detailed as possible. When you’ve prepared a budget, you should practice a high level of discipline to adhere to your spending plan. Have a spending notebook in which you note down everything you buy. This will help you in monitoring your spending and compliments your budget.

4. Join a medical cover scheme

Many fortunes have been ruined by huge medical costs. If you fall ill when you’ve a medical cover, your finances will not get strained. Pay your premiums without fail.

5. Save for an emergency

In life, emergencies do happen. Be it a medical emergency, a car repair, or house damage repairs, at some point, you may need to meet unexpected expenses. Worst still, a job loss results in diminished or no income. It’s always good to be prepared to meet such unforeseen challenges. An emergency can gobble up large sums of money.

We can’t always be fully prepared to deal with an emergency, however, if you’ve got some savings towards it, you’re half the trouble. Make a habit of putting aside part of your income to this emergency fund. Your emergency fund should be equivalent to about three months’ worth of expenditure. The good thing is that if you have a good amount of emergency fund, you will stay afloat and financially stable whatever the emergency.

6. You should pay off your debts

Debts can overshadow your vision and cause financial stress. As debts pile up, you may find it harder to attain your financial goals. If not well managed, increasing debts leads to poverty. What should you do then? Simply pay your debts. There are no shortcuts to financial freedom.

Assess your debts and pay off those with high-interest first. Set a minimum amount of money to go into debt clearance every month. In addition, if you get some extra income that you had not budgeted for or money from cutting down expenses, allocate it towards debt repayment. Once you have completely repaid one loan, use the allocation towards the repayment of other debts.

You can as well dispose off unwanted items at home and use the money realized to settle debts. Avoid using your credit cards when it’s not necessary.

Managing debts helps in improving your credit score and wards off money-related stress.

7. Save money

The moment you get that job or income, start saving. Remember the clock starts ticking towards your retirement the day you get into that job. The major objective of saving money is to cater for your old age when you’ll not be working. You also need to save money for an investment, to buy a home, or to further your education.

The best way to save money is to decide the amount you would want to allocate for savings each month and put it aside. Whatever you’re left with after taking out the savings is what you can spend. Cultivate the culture of saving money from an early age. Many people think that it’s only people with a big salary who can save. The truth is anybody can save as long as they’ve the desire to. You should know that the higher the income, the higher the expenditures.

8. Invest your money wisely

Invest your savings in ventures that will yield returns over time. Don’t wait to earn a fat salary to venture into business. Start a small business and nurture it to grow. Even when you’re in college, you should start and run an enterprise. This is the best time since you can make mistakes and learn from them. Moreover, you’ve the energy and ability to adopt the latest technology into your business.

You can buy a business when its value is low and invest in it to bring it to profitability. It’s advisable to diversify your investment portfolio to shield you from sudden misfortune. If you’re not sure of what to invest in, you can seek advice from investment experts.

Financial freedom doesn’t come so easily. Careful planning, financial discipline, and learning a lot about managing your finances leads to financial freedom. It may mean sacrificing a little every day for the betterment of tomorrow. If you can follow the above tips, you’ll start accumulating wealth through investments and enjoy a more fulfilling life. It’s never too late, start from where you are, set your financial objectives and put all your focus on achieving them.